25,000 people to have their debts cut or cancelled by DWP

25,000 people to have their debts cut or cancelled by DWP200,000 cases are now being reviewed to see who will have their debts scrappedCommentsMoneyNeil Shaw Assistant Editor (Money and Lifestyle)06:40, 13 Apr 2026View 3 ImagesDebts will be torn up for thousands of peopleTens of thousands of unpaid carers are to have their debts cut or cancelled in a sweeping Government review of historical overpayments. Some 200,000 people who were left owing money as a result of “confusing” earnings guidance will have their cases looked at again, the Department for Work and Pensions said.‌The Government estimates that of these, about 25,000 carers will have their debts cancelled or reduced, or receive refunds where they have already repaid money. The issue of people being penalised for going over their earnings limit for carer’s allowance, even by as little as a few pence per week, has been branded a “scandal” by campaigners.‌An independent review led by former charity boss Liz Sayce concluded last November that many carers felt they were “treated as criminals, with resulting feelings of fear and shame”. Ministers accepted 38 out of 40 recommendations in the report, which found that between 2015 and summer 2025, carer’s allowance guidance was “ill-defined” and “systemic flaws” prevented many from properly reporting their earnings.‌View 3 ImagesThe Department for Work and Pensions is taking actionThe Government says about half of the promised changes have already been made, with further reforms under way to modernise the benefit and prevent similar problems in future. Historic overpayments led to many carers – who had to earn £151 a week or less to qualify for the allowance – unwittingly racking up unmanageable levels of debt, and some quit their jobs as a result.‌The earnings threshold rose to £196 a week last April, and again to £204 net per week for 2026/27. Carer’s allowance, which is £86.45 a week, is paid to someone who spends at least 35 hours a week regularly caring for som...